FTC Takes Legal Action Against Abusive Loan Mod Companies
A group of prosecutors has taken legal actions against loan modification consultants accused of using deceptive practices to lure in desperate homeowners. The move is part of a large-scale sweep led by the Federal Trade Commission (FTC) across 19 states.
The prosecutors filed a total of 189 legal actions, including lawsuits and cease-and-desist orders. The move was announced on Wednesday by California Attorney General Edmund Brown and FTC Chairman Jon Leibowitz.
During the announcement, Leibowitz also sent a notice to scam artists, saying they are “full of hollow promises” and work only to serve criminals. He also urged troubled homeowners to be more vigilant in dealing with mortgage assistance agencies.
The suits filed include a group called the Lucas Law Center, which allegedly charged consulting fees of up to $3,995 and told borrowers to stop making mortgage payments in order to pay it. Other companies include U.S. Foreclosure Relief Corp, Apply2Save Inc, and Loss Mitigation Services Inc.
The sweep also included five large firms, including their staff members and subsidiary companies. The suits amount to several million dollars in civil penalties and compensation for victims, and demand that the firms be permanently banned from doing business.
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